As mentioned in the Sunday Papers yesterday, there has been some controversy sparked after remarks made by Gearbox’s Randy Pitchford to Maximum PC regarding Steam, where he stated that the digital distribution service from Valve was “exploiting a lot of small guys.” This was later countered by an article on Gamasutra where Tripwire’s John Gibson retorted, “Ask the Tripwire Interactive employees if they feel exploited, as they move into their new offices paid for by the money the company has made on Steam.”

Interested to see if there were other positions we spoke to 2D BOY and Zombie Cow, who have sold their games on Steam, to find out about their experiences.

Says 2D BOY’s Ron Carmel:

“Valve’s digital distribution agreement is the simplest and most developer friendly agreement I’ve seen so far, and we’ve signed over a dozen of those. Also, no other digital distribution service I know of, PC or console, pays a higher cut of the revenues out to developers.”

But before we get to that, let’s elaborate on the original Pitchford and Gibson quotes to provide context. Pitchford was explaining why he doesn’t trust Steam as a businessman. He says that “Steam helps” when it comes to distributing games, but continues, “As a guy in this industry though, I don’t trust Valve.” When Maximum PC point out that Gearbox have worked closely with Valve he adds, “I, personally, trust Valve. But I’m just saying, honestly, I think a lot of the industry doesn’t.”

The point of contention is Valve being a games developer, but also owning the distribution platform used by their rivals to sell games. Pitchford argues that Steam should be a separate company, and doesn’t mince his words.

“There’s so much conflict of interest there that it’s horrid. It’s actually really, really dangerous for the rest of the industry to allow Valve to win. I love Valve games, and I do business with the company. But, I’m just saying, Steam isn’t the answer. Steam helps us as customers, but it’s also a money grab, and Valve is exploiting a lot of people in a way that’s not totally fair. Valve is taking a larger share than it should for the service its providing. It’s exploiting a lot of small guys. For us big guys, we’re going to sell the units and it will be fine.”

There’s clearly two arguments going on here. The first is that Pitchford believes there’s a conflict of interest for Valve, not only creating and selling games but promoting and selling those of their rivals. The second is that Pitchford claims Valve is exploiting the smaller, perhaps independent developers, by taking too large a share of the money made. It’s this second point that has received the attention so far.

There are complications in investigating this. When a developer signs up to have their game sold by a digital distribution service they also sign a non-disclosure agreement saying that they won’t reveal the details of the deal publicly. This isn’t specific to Steam or Valve, but it does of course make it very hard for anyone on either side to definitively prove their case. It was this point that Gibson directly addressed in his article.

“So, is Valve exploiting independent developers? In short: absolutely not. Without pulling any punches, I can say with certainty that if it weren’t for Steam, there would be no Tripwire Interactive right now.”

He offers an example of the sorts of offers put toward them when first trying to get Red Orchestra signed for a publishing deal.

“We’ll give you a 15 percent royalty rate, take the IP rights to your game, and slap a $1.5 million administrative fee on top of your recoupment costs.”

Gibson goes on to explain that the contract from Valve was the most straight-forward he had seen, and describes the royalty agreement as “great”.

“We were able to recoup our development costs for our first game within the first week of sales, and sales were straight profit from that point on.”

He drives this point home by concluding:

“Ask the Tripwire Interactive employees if they feel exploited, as they move into their new offices paid for by the money the company has made on Steam. Or me, as I drive away from the company that was built from the royalties we made on Steam, in my sports car paid for by the royalties we make on Steam, to the home that I pay for with the royalties we make on Steam. If that’s exploitation, I’ll take a little more.”

We spoke to two other independent developers who have published their games via Steam as well as on their own sites, interested to find out if there were examples of the issues Pitchford raised. First we spoke to Zombie Cow’s Dan Marshall, who recently had their point and click adventures Ben There, Dan That! and Time Gentlemen, Please! added to Steam’s store. He replied to our query succinctly:

“Sorry, it’s not a very interesting story on my part. I’ve got nothing but positive things to say about Steam – the guys I dealt with were thoroughly charming and helpful, and I feel far from exploited.”

Next we contacted 2D BOY, who garnered great attention and success almost a year ago with the release of World Of Goo. Ron Carmel told us,

“I know a lot of small developers who distribute their games via Steam and the only complaint I’ve ever heard is that they’re not always very responsive over email. I certainly have not heard anyone saying they feel exploited. My experience has been nothing but positive. Valve’s digital distribution agreement is the simplest and most developer friendly agreement I’ve seen so far, and we’ve signed over a dozen of those. Also, no other digital distribution service I know of, PC or console, pays a higher cut of the revenues out to developers. I think they deserve every penny of the revenue they get. They’ve invested a lot of money and effort building and supporting their distribution platform and every game that gets on it benefits from that investment.”

Clearly this is not a definitive survey, and only two more anecdotes. But the impression given is one of a service quite unlike Pitchford’s suggestions.

This of course only addresses the second point Pitchford makes. What about the other thought that there’s a conflict of interests?

Gibson addresses this in his article, acknowledging that Valve could exploit their position, but then explaining why he thinks they do not.

“Valve has a very unique take on this matter, and one that I think is smart business. Rather than say, “I don’t want to sell your game, because it’s a competitor to our game,” Valve says, “Our game is good, and so is yours, so let’s both make some money together.” The attitude is if the game is good, they’ll sell it. This is different than standard retail publishers and other digital distribution companies. GamersGate, for instance, refuses to sell games that require Steam because of the conflict of interest. And while they claim to be a better model for digital distribution because GamersGate is a separate business from their related retail publishing company Paradox Interactive, ask Paradox’s CEO if they would sell a game at retail that requires Steam.”

But of course the issue remains that they could. Perhaps if there’s something to take from Pitchford’s concerns it’s to ask questions about the position Valve is now in. They certainly did provide lots of promotion on Steam for Killing Floor – a game you could argue directly competes with Left 4 Dead – both are multiplayer co-op zombie survival games after all. Were the position being abused Valve could have taken their cut from sales while squishing the rival game from attention. However, they did not. (You might well point out that since they’re receiving a cut, it wouldn’t make sense to hide the game.) But they could have.

Since Valve wholly owns Steam, and Steam makes money from the sale of games made by rivals, Valve profits from the games made and published by their rivals. You can see why this may irk some in the industry. (You may also admire them for their moxie, and be rather impressed they’ve pulled this off.) But is it an issue?

Of course, if Steam were the only viable digital distribution platform (let’s say that Valve had patented the system, and no one else could compete) then this could clearly be an enormous issue. It would be a monopoly. But of course it’s not – there’s many others from the indie systems like GoG to IGN’s (and therefore News International’s) Direct2Drive. There’s GamersGate, Impulse and there’s Metaboli. Also, major publishers have their own non-independent online distribution services. The question is, how much of this market does Steam dominate? Is it viable for a developer or publisher to refuse their game on Steam?

The next obvious remark when considering conflicts of interest is: Microsoft? A games developer, and publisher, and owner of a console, and unique controller of its digital distribution. And of course the same goes for Sony, especially with the release of the digital download only PSPgo, Sony now also wholly controlling the sales of that platform’s content. If you wish to publish your game on either of these platforms you must first have it be certified by them, and of course pay a cut of your revenue to them for the right to sell your game on their machine.

Of course, finding parallels doesn’t justify anything. It simply puts the situation into a larger context. To borrow Kieron’s comment, because another country gives up its freedoms, should ours do the same? Steam, and of course other ubiquitous digital distribution platforms, could be argued to be the consolification of the PC. A console’s real purpose is a controlled sales channel from which the channel owner profits from everyone else’s access. So is it reasonable for Valve to run a business that sells and profits from the products of their rivals? While they appear to not be currently abusing this position, could they in future, and should something be done to prevent this happening? Or does the fact that games are sold on Steam at the independent discretion of the developer or publisher mean this objection is meaningless? Since the smaller developers who have spoken about the subject are so overwhelmingly positive, are Valve the right people to be in control of such a service? What do you think?

EDIT: Bit-Tech spotted comments from Garry “Garry’s Mod” Newman about whether Valve had exploited him at all. He said no. That’s either one hell of an NDA or they’re pretty decent to developers. You can read BT’s article here. There’s also details of the effect on Garry’s Mod sales from a Steam sale here.

I just think a spinoff would be of best interest to everyone. If Steam was forced to make money as its own service, I’d expect to see even better support and all that. Also, Steam needs to realize that there are other services out there, and if they want my business then they should try to work hard to get it, with places like Gamersgate, GOG, Impulse, and all that. But there’s not chance of that happening anytime soon, Valve wouldn’t spinoff their biggest moneymaking venture unless some higher power forced them to.

Metaboli are the reason why I’m not buying Batman: Arkham Asylum. Why? Because it’s on their ‘Coming Soon’ list and it should be part of my overall rental package in a couple of weeks.

The thing with Metaboli is that you need to just think of it as rental. It’s exactly the same as having a subscription to LoveFilm or Blockbuster. An all-you-can-eat gaming buffet at a flat price. You don’t own this stuff, but you get access to more than you’d ever have the time to get through, and they do add a bunch of stuff every week.

They used to have super-restrictive DRM, but have moved recently to a much more Steam-like system where only the main EXE of your game downloads are encrypted, so they’re fully moddable. A pretty huge perk.

Perhaps there is a middle ground though. Isn’t it possible that indie developers are treated far better than they would’ve been elsewhere, but still not as well as they *should* be?

Say they get 40% on Steam and 10% from a traditional publisher, perhaps they *should* be getting 70%.
In that case, I can understand why the indies are happy with the deal Steam is offering (it’s way better than the alternatives), but it’s also true that they’re being exploited. They’re still paying through the nose compared to the minimal costs incurred by the digital distribution platform.

Anyway, it’s an interesting debate, and I think the more attention is drawn to it, the more openness and real competition we’ll see in the future. Wouldn’t it be nice if digital distribution services actually had to compete on who could offer the biggest cut back to the developer?

Indies mostly love Steam because of the exposure they get. I mean, with a metric fuckton of users on Steam, they enjoy even more popularity than many other outlets. It’s in Tripwire’s interest to get in bed with Valve for all that popularity (the fact that they make good games certainly helped) as opposed to D2D or whatever.

The problem is that a traditional publisher will go out of their way to market your game to an audience that hasn’t already been acquired to your game – that’s sort of the point of marketing. As a publisher, Ubisoft will run print ads, billboards and TV spots for your game. Valve only pitch games to the people already on Steam, and don’t actively pitch Steam to anyone at all.

Well put. I don’t know much about how the industry works at a level like this (And because of non disclosure agreements we probably won’t get real numbers. What we’re being told by the indie developers seems very promising though) but I think it’s just a case of the bigger companies being jealous that Valve beat them to a good idea and are now reaping the rightful bonus of taking such a risk. Developers are going “That’s not fair! We should be making lots of money too! How dare they?” and try to make it out like the indie developers are suffering. From the citations in the article, however, it seems the exact opposite. Indie games have been given a place they can flourish.

It reminds me a lot of the tantrum the music industry is throwing over online distribution of music. I might be wrong but to me it sounds like big corporations shouting “They’re doing too good a job and making us look bad! Somebody make a law to stop them doing that!”

I can see why developers would feel frustrated that another developer has created a distribution channel. But it does sound, as the article rightly says, as though there are plenty of ways developers can get their games out there without going to Valve.

Steam’s only rival to me as a “hardcore” gamer is impulse. No-one else has autopatching, and for a multiplayer game (which are the only titles i will buy near release for high prices) i need efficent delivery of patches. Indeed, impulse and steam will download the differences (as i understand) between the 2 states rather than a generic (and often bloated) patch.

So, if you want to get £20 or more from me for one title you need a decent multiplayer game with seamless patching.

Other than that, your unlikely to ever get more than £5. And for £5 i’ll put up with a lot, limited activations, download limits(ea store) a disc in the drive or even messy patching.

There should be a lot more discussion over Microsoft’s Xbox/PC conflict of interest. There, we have a conflict that’s actively being abused (Alan Wake, for instance).

Also, Brad Wardell threw out some guesses on Digital Distribution market share last week in a forum post. He estimates Steam has 80% of the PC digital distribution market share: link to forums.demigodthegame.com

Add another 50 thousand to the lower figure for concurrent TF2 & L4D players & you’re probably up to 90% of people using Steam to play VALVe games right now but that’s still only about 10-15% of the people who are logged in to Steam as shown by the Concurrent Steam Users numbers.

I won’t get into the whole restrictive bit of digital distribution because I want to do some more thinking on that before I make a comment relating to it. I will, however, say a quick thing or two about Valve making money from their competitors’ games.

How is this different from EA or Ubi or whoever else publishing a game for a company they don’t own?

I don’t think it is. I think people are troubled by the relatively small size of Valve, and the fact that they don’t have “Valve Seattle” handling e.g. the Half-Life series and then another studio called “Valve [insert city X]” that handles the L4D franchise, and then a mother-studio located in another city that handles the publishing side of things.

Valve have created an infrastructure that allows a small company to become a publisher as well as a development studio without needing to expand to multi-billion-dollar, multi-thousand-employees-across-multiple-branches-in-multiple-countries size. Without being a Valve apologist, how is this a bad thing? It means more publishers, and maybe more developer-friendly publishers at that. Admittedly, they lucked/savvy’d out and did something that no one else can now do by creating the means of distribution, but this aspect (Valve being a publisher) of the digital distribution problem is still a fairly good thing for gaming as a whole.

Are people really complaining about a publisher picking up a game that wasn’t produced inhouse? Because unless I’m wrong, that’s essentially all Valve does as a publisher for (e.g.) Killing Floor: sell the game for them, taking a cut of the profits and not owning Tripwire. It’d be like saying “oh, there’s a conflict of interest between EA and Double Fine because EA DICE makes games and EA doesn’t own Double Fine!”

This. Pretty much is my thoughts – Valve isn’t acting too differently from the world’s megapublishers. They have the variable slide of both in-house developers, part-owned developers, developers working on IP they own, etc.

Any specific differences are fairly minor, and Valve seems to be more happy to publish through Steam just about any game, without needing to work out a complex deal involving taking IPs and so on.

This is very different from a classical publisher-developer relationship. A more fitting analogy would be if EA also happened to own the largest retail-chain for games, and Ubisoft, Take 2 etc. would all have to sell through EA’s stores.

I think the second argument is largely moot – as people have said, it’s a free market, and independents seem to be rather happy with Steam.

As for the first argument, I think it’s worth more debate. One interesting thing that seems to be happening is that Valve are buying up or hiring small indie outfits – all of Valve’s recent games, as I recall, were from outside people brought into the fold. Half Life is Valve’s only really central product that isn’t something it bought in for a long time. Maybe that’s OK, but I don’t know if their role of developer and publisher in the same organisation is perhaps a little confused?

That’s not really the case. Valve hired the Team Fortress people years and years ago (remember, TF2 was—with all its false starts—10 years in development). Portal was created when Valve hired a team of students, who had created a prototype game, Narbacular Drop (which you can see at link to digipen.edu), but Portal has so much more to it that it’s definitely not a case of them just buying in a product/company. Left 4 Dead is the only product that the claim could apply to, but in reality, Valve and Turtle Rock had had an extremely close working relationship for many years, and Valve had already made a significant contribution to L4D before the merger.

Just to clarify: yes, Valve does hire people who have great products, but they have never just slapped their own label on an existing product; they’ve always added much more value into it.

Who knows what reasons those games aren’t up their. If it is just “Valve doesn’t like them”, then these games are going to get a lot less exposure, and earn less money.

Is it right that Valve’s tastes dictate how much money games make?

I predict in the (long term) future, there will be a section of Steam that is completely open and self regulated, that anyone can put any game up one (pending peer review), basically something like the Xbox Indie games. They could make the more popular stuff available on the regular section of steam too.

All the “they could exploit the system” talk is very similar to “Google could take over the world one day if they wanted to”. I don’t like conspiracy theories. It mostly amounts to wasted internet ink.

Also, I think Valve doesn’t have that much of a conflict of interest here – they make their money if they sell their own game or their competitors’. If they snubbed “Killing Floor”, for example, I believe they would have lost some pretty decent profits – from KF itself and from other companies who would have heard about it and stayed away from Steam.

I think there should be an easy way to transfer your bought games from one digital distribution service to another (at least those that the new one has available). That way, you will never be stuck with one distributor the day you feel that company is being abusive. In the same way I can transfer all my money from one bank to another.

And that is the crux of it, in my opinion. Currently, no such system exists; I’m not sure if the technology for such a system exists; and I am ready to claim that the will for such a system to exist definitely does not exist.

Ideally, we need there to be a single, third-party, neutral and trustworthy encryption protocol that would allow all our games to be decrypted by any digital distribution application, so that deciding which application to use would be much like deciding whether to use MSN or Trillian rather than deciding whether to use a PS3 or a 360.

Unless a billionaire sympathetic to our plights pops out of the woodworks, though, that isn’t going to happen. The closest thing I can think of is Stardock’s GOO – and that’s yet to see use beyond a few products on Impulse. We’d need GOO to become the only encryption/decryption process in use across the whole spectrum of PC digital distribution, and for all current digital distribution/DRM platforms to “read” GOO.

Yes, there is not a market for this because it’s economically one sided, like “I wish the banks would just give me free money when I’ve had a hard day” or “If I pay Microsoft for a copy of Windows, Apple should give me OS X for free.”

Think about the economics of it, from their point of view. Steam’s costs are maintaining the infrastructure to support all the downloads and multiplayer interaction, as well as the administrative costs of tracking your purchases and games, and finally the actual license/royalties they pay to the content owners. Their revenue is when you pay them. If you don’t pay them, but instead pay Impulse, then plug the CD Key into Steam and expect it to give you that game, you’re using their resources without paying them anything.

This doesn’t map to “transferring my money to different bank accounts” or “transferring my phone number to any cell phone provider”, because when you do those things you’re paying the company you transfer to. The bank makes its money off of interest from your money and off of charging you service fees for your account. The phone company makes money off your monthly subscription.

How would Steam make any money by providing you the ability to access all the games you didn’t buy from them?

As steam is currently part of Valve- a privately owned company- it does have some distinct advantages and disadvantages…. while the site is not accountable to anyone but its owners and the law (no market influence from share holders in other words) it is also not effected by the negative aspects of market accountability- such as short term investors and investment funds who, rather than seeking sustained performance gains in order to recieve nice divitends each year, are simply looking for an increased price at which to sell their shares. A system which encourages such aims can have just as much influence upon creating a profits first mentality as an internal conflict of interest. Similarly a split between Valve would also place greater finacial pressure upon Steam’s management- something which could just as easily lead to exploitation emerging…

On a more personal note… I find it rather hard to see Pitchford’s argument as valid. As he so clearly states- ““I, personally, trust Valve”. If this is the case then why propose that Valve cannot be trusted? Does he have so little faith in his own opinion that he chooses to contradict it so readily and obviously? If so, why is he writing such an opinionated article? Furthermore, as a rival developer, does Pitchford not also have a conflict of interest? Is it not plausible (excluding the close personal relationship we know Pitchford has with Newell, [see: River-Boat Poker…]) to suggest that he might wish to reduce the competitive advantage which an extra revenue stream offers Valve? I would hazard to suggest that it is the success of Steam which we can thank for the continued success of Valve’s games… the simple fact that they can continue to gain private funding over extended development periods- without being at the mercy of a publisher- and even comfortably absorb a loss is one of the reasons why their games are so consistently polished and innovative.

So in short I believe that Valve isn’t broken, so why try to fix [/break] it.

Talking about the amount indie devs get. There’s been recent controversy over the amount artists get whom sell digital distributed 3d models. Turbo squid reduced the amounts artists get to just a 40 percent share, you only get more if you exclusive with them. Companies are always looking to sqeeze those under them.

It sounds like the person is advocating some kind of monopoly, ruled by a benevolent company such as microsoft sure that would be much better.[/sarcasm] They would also have a coflict of interest anyway.

All we really need is plenty of competition like we appear to have or some persons to come up with proper laws about digital distribution, ownership of content etc(which they should any way).

I don’t see any problem with Valve owning Steam at all, if other companies don’t like it then they should go elsewhere to publish games.
Until Valve start to rip off developers (which would bring about a backlash that would destroy them) I shall have every bit of faith in them, and Steam.
Also, as many have already mentioned, this business model is exactly the same as many other businesses. It all sounds like jealousy from those that wish they had had the balls to try something like Steam in the first place.

Man. I expected to read objective article. But you should better call this one ” Valve , let me bow to you golden greatness and kiss your legs while wallowing in dirt.”

I mean its clear RPS guys are huge Valve supporters , but this is really to much.

Fact that games like L4D constantly top bestseller list. This easily faked fact is huge advertisement.
And since Valve is owning distribution client , there is no reason not to do this. After all they can not be blamed for promoting their own games, over competition.

I can’t quite work out what you were expecting. Are you saying my article is biased because I didn’t say that Valve might be faking their own sales rankings with absolutely no evidence? (Left 4 Dead 2, I believe, is only available to pre-order via Steam, and so is obviously going to spike over games available on all distros. Or it’s pre-ordering in just vast quantities. Or they’re lying. I have no evidence either way.)

It’s NOT a journalist’s job to “consider both sides”, a phrase I’m sick to death of hearing when people talk about journalists (often about the BBC), because when people use that term they don’t mean consider, they mean “present both sides with equal validity and let the reader make up their own mind”.

This is rubbish.

The job of a Journalist is not to present all the information and then let the reader decide, lack of bias does not mean giving every side/opinion/option/person equal consideration. In other words neutrality does not equal giving equal validity.

The job of a journalist is to try and discover the truth, then present that truth (with sources) to the reader.
Lack of bias means the journalist should investigate the news with no preconceived notion or conflict of interest – their opinion should reflect the truth (as best as they can uncover it) as based on the weight and merit of the evidence. Their opinion (backed with evidence and sources) should then impact the opinion of the reader. Impacting the opinion of the reader is the whole bloody point – without it, it’s just mindless copy and paste.

All the best journalists write with a very clear voice and a very solid and forthright opinion – and all of them back that opinion up with facts, sources and evidence, basically they tell you their opinion and then tell you WHY they have that opinion.

I’m usually saying this to people who think that creationists shouldn’t be ridiculed and their opinion be given equal merit (they should, and it shouldn’t) to hundreds of years of collected, catalogued and verified evidence, it’s a bit odd to be saying it on a gaming blog.

I don’t see any conflict of interest here. Valve has always been very good about giving third party games equal advert space on the Steam storefront. They do a much better job of being fair to third party devs (small and large) than either Sony or Microsoft. When I look at the Steam storefront right now, the only first party game I actually see right away is Left 4 Dead GOTY, everything else is third party.

I think keeping Steam under ownership of Valve ensures product quality in both platform and the games offered. Since Valve develops both its games and Steam at the same time, it can ensure that the platform works best for games and keeps it on the bleeding edge of technology and innovation. They offer Steamworks for any dev that wants to use it, and doesn’t keep it to themselves. I consider this to be very generous and a rare activity in the game industry.

It seems like the people who like Steam are basically using the old “benevolent dictator” argument – Valve’s in charge, yes, and Valve sets the terms, but those terms are good so everybody is cool. And while this is usually a terrible argument, here I gotta say it’s more compelling.

It’s likely the reason why Valve is so nice is because they are Valve: they move so many copies of their own product that they, really, don’t even need the Steam money all that much. Half-Life and Portal and Team Fortress and whatever are all, essentially, subsidizing Valve’s good attitude. If Steam was an independent company that lived or died 100% on its storefront, there’s absolutely no guarantee that attitude will last: in fact, I could guarantee it would go away as soon as the business/profit margin is threatened.

Although it’s clear to see where the conflict of interests argument is coming from, in practice I suspect that, for the time being at least, Steam is better off under the auspices of Valve.

Valve are who they are ie a pretty funky bunch of guys doing their thing the way they want. I think I would prefer Steam to be run by them, rather than being let loose to either truly become the money grabbing monolithic king of digital distribution, or get snapped up by the likes of EA or Activision-Blizzard.

Talking of EA and Acti-Bliz, it’s notable that both companies have games for sale on Steam, which I’m fairly certain must say something.

If you wish to publish your game on either of these platforms you must first have it be certified by them, and of course pay a cut of your revenue to them for the right to sell your game on their machine.

Steam already has alternatives, so I don’t really see them exploiting their monopoly much. The PC has always been about choice, anyway, and Valve won’t be able to change that. Also, it seems that Battle.net 2.0 is basically Steam rolled into Blizzard’s own stuff – they could be the ones to step up as a major competitor, should the need arise.

They already have, though. Think about it – Steam is the biggest digital distribution platform, but the name of its game is restricting our choices. Games purchased on Steam can only be used on Steam with the account that purchased them; you can't resell games you’re not playing anymore; Valve reserve the right to do whatever they want to your account at any time; they don’t even look into VAC bans – if you’ve been banned (which essentially makes every multiplayer game that uses VAC that you have on your account unusable), then tough – get another account and buy your games back.

Without this restriction, digital distribution would never have taken off; and I’d love to believe that Valve are secretly working against DRM and that later on, when they control the market, they’ll suddenly cast off the shackles of oppressively restrictive content management systems, declare a new hippie age of computer gaming and force established publishers into playing by there rules; but actually thinking that this fantasy might happen and acting accordingly is plain stupid.

Food for thought:
If the digital distribution site you use goes bankrupt and/or cancels what happens to you ability to DL the games you bought? My guess – they are gone… that’s most likely in your EULA if anyone actually reads it.

So why trust Valve? Because this company makes great games! This company will thrive because we trust it to survive and therefore we want to buy our games there. Places like Impulse have much smaller companies behind them and therefore are much riskier…. for the same price.

If Steam is pulling 80% of the digital distribution its because they have earned it – free markets will always move toward high efficiency

If Steam goes bankrupt, there will be a betting war between the major publishers to buy it.
If a smaller digital distribution site goes bankrupt, it will likely be taken over by another one, who could use the additional customers. So if, for example, DLGamer goes bankrupt, I bet Impulse or Steam or someone else will want to buy them. Because all of their users will suddenly be forced to use your program if they want to play their games again.

Unless you buy from a really obscure site or directly from a company, I think it’s unlikely you will lose your games.

I gotta agree that Steam is a huge step forward for most smaller devs, and we wouldn’t be seeing the current huge boom in indie games, small russian FPS games, etc.. if it wasn’t for what steam started.

Developers get totally exploited by the big publishers all the time, as many of the recent shenanigans and closures have shown. Even making a successful game isn’t often enough to save them from their faustian bargain.

An interesting phenomenon though is that recently the big publishers are on steam… so maybe the small devs are losing out twice! Steam works great if it’s the only cut you pay, but if you’re paying out to both EA and Steam…

That said, I think Steam’s customer service is pretty terrible. they seem to be seriously in need of more staff. Also, they should be a lot more transparent about their practices, both for Devs, sales and customers. Not listing DRM, not fixing broken games, not responding to emails, not explaining why accounts are locked, etc…
On the flipside, i think games journalists need to ask more questions to valve about Steam. It’s great getting all the info on L4D2, but how about asking them about some of the issues?

I wholeheartedly agree. I know nothing about the developer relationship with Steam beyond what’s mentioned in the article, but their customer relations are mediocre at best. Which is the primary reason why I don’t really trust Steam: I use them because it’s incredibly convenient, but since they don’t offer refunds, don’t generally discuss banned accounts with the account holder, have strong regional pricing and regional lock-in, and actually offers quite a clumsy user experience, I’d love to see RPS do an interview with Valve’s Steam guys discussing customer issues.

For me, the most problematic argument in this debate, as pointed out in the article, is that “other companies are worse”. Or even that “Valve’s offer is the best”. Just because Nintendo’s, Sony’s or Microsoft’s deals are horrible doesn’t mean Valve’s position as the benevolent leaders of online distribution cannot be problematic… or change to the worse, once the monopoly is established (monopoly isn’t the lack of competitors, it’s the ability to ignore competition since the market is getting too dull in one’s favor). I don’t like the shift from actually owning the software you buy to essentially “licensing” it, only being able to legally access it via a controlled channel. Digital distribution is an entirely new (and soon the leading) way of getting games to customers, and seeing it more and more in the hands of a single company that also uses it for its own products and has a rather forceful approach to its implementation is worrying.

I admit, I’m mostly seeing this from the consumer’s POV. Since you are stigmatized as an “angry internet man” when complaining at these sorts of things from the customer’s perspective (thanks for the “trolling culture”, IMDB and 4chan!), I’m glad someone from the opposite side is backing up what many gamers knew and preached since the early days of Steam. I could go on and list the numerous disadvantages of having games locked in the way Valve is doing it with Steam, but I don’t really feel like discussing every single aspect of this.

I’m more concerned about the risk of problems we aren’t seeing at this point, yet are very probable if you look at the history of monopolies and the disadvantages of waning competition. Basically: Steam 2020. Will Valve still be your buddy? Will anyone still remember Impulse and D2D? I envy the optimists among you…

Today, Valve still has to care about consumer goodwill. So I’d rather see this discussion (and an eventual reaction on Valve’s side) now, than in 10 years when they don’t have to care anymore. And I like that there is any discussion at all.

The only thing I know for sure is that blindly trusting a company’s good intentions, no matter how awesome their products are, is generally a very bad idea…

There is something one must consider when making suggestions that would weaken Steam in the marketplace. Right now, your enemy, as gamers, is not Steam or Valve, it’s brick-and-mortar stores. We like Digital Distribution, right? Right. We like paying less for Digital copies because you don’t get a physical item and the overheads are much lower for distributers, right? So why are most new releases games still £29.99/£34.99 on Steam, which is more expensive than brick and mortar? The reason is that brick and mortar stores are putting pressure on publishers and distributors, using their buying power to force a higher Steam price.

Example

“Hey, THQ, you know that latest PC game you’re bringing out? Well if you want your next game to get shelf-space/promotion in our store then I’d strongly suggest you give us the preferential price over Steam”.

It’s the same thing Walmart and big-box stores have been doing for ages, demanding cut-throat prices under threat of corporate boycott.

Steam is the only DD system with the marketing clout to win over publishers. Once publishers realise that they will make more money through Steam and can take the risk of pissing off brick and mortars, they will do it and prices on Steam for new release titles will drop to a more appropriate level. Steam is getting to that point, particularly as PC users adopt DD on a larger scale.

This is a case of pick your battles. Steam offers a good deal to developers and publishers alike. It is not perfect and at some point, there may come a time when the DD market needs a bunch of competition and the perceived conflict of interest needs to be dealt with. At the moment however, the larger issue and threat is coming from brick-and-mortar strongarming, so let Steam deal with that before we start bitching at them to seperate from Valve aye?

You are probably right in what you say, but they don’t do themselves any favours by gradually introducing more and more ‘features’ which make them look remarkably similar to bricks and mortar stores, regional availability and pricing being two of the key ones.

The optimist in me would love to believe that those features were introduced in order to gain the publishers’ trust before Valve brutally turns the tables on them and demands the customers be treated better.

The realist in me presumes this isn’t the case and thinks I’d be a fucking moron to believe it.

Is there a clear list of critieria available anywhere that lay out exactly what a game and game developer must be/do to be accepted onto Steam? It seems that if this process was transparent and it was clear to the developer why a game had been turned down then this would go a long way to sorting this kind of thing out….or am I being too simplistic?

Yes that is too simplistic, because if some company had a game that technically fit the criteria but because of some loophole was a game Valve did not want to publish, they could be sued for refusing it.

It’s similar to how the ratings boards can’t give transparent criteria for rating movies. You’d have movies that technically fit the criteria for PG even though they actually had content that deserved an R.

The issue is for randy and for me and a lot of other people is although there are loads of competitors to steam, there are no competitors in anywhere near the same league, the only alternative worth talking about is impulse and it’s consistently more expensive unfortunately, hopefully for the good of the industry someone comes up with a healthy competitor to steam before a monopoly kicks in.

there’s also an interesting aspect of Digital Distribution that because it’s an overarching service consumers tend to be anti competitive about it they’d prefer if they only had 1 place for all their games, which is bad for them in the long run.

Excellent article! I really, really have to want a game for me to buy it elsewhere than Steam. For example, as much as I want Borderlands, I know I would not have bought it if it were not on Steam. Lord of the Rings Online (my main MMO) is not on Steam, but I still run it through Steam to be with my friends, etc. (also X-fire blows since it won’t work on top of DX10 games). So yeah, I am entirely happy with Steam, and am super glad that they distribute and really push indie games.

Introversion have sung praises about Steam before. If I remember correctly, they claim to have sold more copies of Darwinia on the day of the steam release than they had in total before that. They also mention the weekend deals as great – even thoughthe price drops, they got a really high uptake.

I have no problem with Valve championing PC gaming by providing an excellent distribution service. Let’s be honest, PC-only games are increasingly rare. Even Valve are moving to cross-platform releases. If one of (if not the) largest digital distributor of PC games is putting the sotlight on the more ‘indie’ games out there – that is only a good thing. Mainstreaming in popularity and recognition and money-making for games which would otherwise flounder can only encourage more originality and, maybe, more risks in the mainstream. If someone comes along and does it better than Steam (as I would argue GOG have done with old games) then that’s great, but for now I’m a happy punter.

I’d rather not buy things on Steam. Firstly, I have to download shit, and I’m off to uni soon and then my bandwidth would be down to nil. Secondly, the paranoia of if Steam ever goes under, I’d lose all of my games. Unlikely, but still.

Like Shamus Young said, we used to pay for the right to play games. Now we pay for the right to ask to play games.

I think it’s legitimate to be concerned about one digital distributor getting to be too damned big, and I think Steam’s certainly the most likely candidate. It doesn’t help that they’re also one of the most invasive digital distribution platforms out there, with a client that has to run not only to install but also EVERY TIME a game is run. This has been a source of trouble for a lot of people (it certainly has been for me) losing access to their games for various periods of time, especially since offline mode works at about a 50% rate. We tolerate it, because Steam is convenient and the deals are good.

Now, right now, Steam’s not a huge problem because Valve is a “nice” company, but once they’ve got a large part of the market and a majority user-base with a huge cache of games on a system as obnoxiously invasive as Steam, it’s easy to see how a shift in behavior/ownership/whatever at Valve could spell real trouble for the platform as a whole.

I love steam its a great service but I do share some concerns over their current dominance especially with moves like L4D2 being more expensive (and some might say existing at all). But thats the only real concern I have for now but the opertunity still exists but so long as the current people are in charge they should keep the status quo because I wouldn’t hesitate to going back to boxed copies or downloads from the developers site.

Valve are one of the best things to happen to PC gaming for a long, long time. For several reasons.

They’re privately owned. IMO the worst thing for a company these days is to be publicly listed. “increasing Shareholder value” as a business driver is just a weaselly way of saying short-term profiteering in the interests of a group of people who more often than not have no interest in what a business actually does and who are simply interested in never-ending growth to drive a share-price up, or taking huge dividends from profits that otherwise could have been re-invested in the business to improve products or services that would benefit the “unimportant little people” in the equation here. You know, the customer.

Valve being privately owned means that they have the freedom to focus their business on the people who really matter. Not shareholders, but gamers. Obviously they want to make as much money as they can, but they still understand that the important people in their business are their customers, and not some parasitic shareholders out for a quick short-term profit.

Valve strike me as gamers first and foremost. They’re not “programmers” or “accountants” or “secretaries” or “businessmen”. They’re gamers who work at those jobs. I might well be casting aspersions here, but I doubt that the suits on the board of EA or Activision / Blizzard are big gamers.

Therefore I think that Valve at heart want what we want. Great games, delivered in an easy, simple manner. They have a dedication to quality which shines through in their games, and they’re happy to take a “done when it’s ready” approach to a game which other publishers are more often than not unprepared to accept, usually because it would negatively affect the company share price (and coincidentally the suits’ stock options).

Because Valve are gamers, they understand that a busy, vibrant and competitive ecosystem is a healthy one. The more good games out there, the better. Everybody wins. And so much the better if they can encourage indies to be successful by offering them a platform offering a good return and wide access.

I might be being impossibly naive, but I really do believe that Valve are the good guys here, that the love of gaming is the marrow in their bones and they want to do everything they can to make it easy for people to either make or get great games. The fact that there aren’t seperate studios all over the place, and that therefore staff can play the other games that are also in development alongside their own, and feed in ideas and suggestions makes a far richer creative environment that just wouldn’t happen if these projects were developed in isolation. The Steam platform has become an integral part of this. I’m not going to pretend that steam is perfect, and that it hasn’t had it’s problems, but thankfully it’s far, far better now, and of course Valve are still working on improving it.

So why might people be afraid of Valve and steam? Abuse of monopoly is the sole reason, I suggest (apart from simple envy). There’s nothing to stop Valve from abusing their position, other than the fact that were they to do so, they’d destroy overnight a reputation that they have lovingly built up over twenty years, that is in all likelihood actually the most valuable thing they posess, and lose the goodwill and business of an awful lot of people. So they’re not going to do something so monumentally stupid.

So the worst thing that could happen to Valve is for the company to be divided up into “business units”, all working seperately, or for the company to be split and floated. It would be the death of Valve, and the only people who would win would be the parasite investors who suck all the good, risk and creativity out of everything they touch.

And then they made Left 4 Dead 2 instead of releasing the DLC. /angryinternetman

All joking aside, see what I mean? It’s so very easy to lose their customer’s trust, and there will always be people willing to buy regardless of trust since Valve is currently the mainstream when it comes to digital distribution. This means that publishers will continue to use them, and people will thus continue to buy from Valve, trust be damned.

We may not be past it now, but there is a point where Valve will be beyond relying on customer trust to succeed. When we reach that point, there will be nothing standing inbetween us customers and being exploited by a system that restricts access to the games we paid for except the good will of a handful of eminently fallible human beings.

I’m not sure I trust Gabe Newell enough to give him free rein with the future of PC gaming.

I’d like to point out a few things.
Firstly, steam and valve are very popular amongst gamers, so you are very unlikely to hear from any developer who will criticise them. Not just because of public opinion, but because of NDAs. People in the industry talk very differently about a great many topics when they are on private forums or in person after a beer than they do online. This is true of distribution partners, price points and piracy, as well as DLC and other stuff.
In private many developers rail against piracy, enthuse about chargeable DLC and point out that games are too cheap. none of this makes for good PR copy, for obvious reasons. I’m surprised and impressed that anyone would publicly criticise such a major and popular sales channel as steam.

As to whether or not the criticism is justified, I think it’s right to be wary of monopolies, but valve just isn’t one right now. I’m a keen gamer and buy most of my games through retail, purely due to price, and crap bandwidth. We don’t need to worry about valve controlling distribution yet. Hell, I’m still indie after many years and have managed that without a deal with steam so far.

Finally, I have to point out that royalty splits from digital dist sites vary widely. I’ve NEVER seen anything below 35%, that would be laughable, and I’ve never seen over 80%. I’ve definitely seen deals from 35% to 80%. Obviously NDA’s mean you can’t say who offers what.
For direct sales, I keep > 90% :D

Steam is the new Nintendo, they rock. They have replaced the physical game platform by a virtual one, AND their virtual “console” actually run games not made for it. Take that console makers!

I use D2D and all that, but I always check first on Steam because I feel like they are a recognizable face, probably because of Newell and because they make games. The Valve Head/Eye dude is much more memorable than the D2D logo, because I’ve seen it thousands of time. Other services are just anonymous whatever, they don’t get my attention as much as Valve does.

I like steam now, but I do fear them. As someone who wants to start an indie PC game studio, I worry what their actual royalty rates are. I have no idea whether they’d take 5% or 50% of gross sales, some percentage with a cap, or diminishing percentage, no idea. That uncertainty alone bothers me. At this point, I wouldn’t even plan to sell boxed copies of the game, I want to go digital only. Doing that without Steam would be insane – they are basically the Microsoft of PC gaming digital distribution. All of the other players are small fry. If Steam takes a small percentage, they fully deserve it due to their nice infrastructure. But since they don’t provide any funding to developers, taking more than 5% seems unfair. Indies have to internalize all of the risk and Steam gets only upside.

One other thing. Steam is pretty good since Valve is still a private company, but what happens if they get acquired or go public? This whole happy fun time will be over, really, really fast. Nothing sucks more than PC game publisher that has shareholders or overlords to satisfy (see, e.g., EA).

My issue with Steam – and it’s an issue I think even Steam downplays and/or refuses to acknowledge – is that it’s DRM at it’s very core. I know there are going to be people who disagree with me on this, and that’s okay. However, a lot of games that require Steam or are bought from Steam require you to have Steam. You have to activate the game online. You can’t really do what you want with the game once you’ve bought it. Their “games as a service” philosophy, to me, means that you don’t really own the game. Rather, their leasing it to you. When I pay money for a product (which I believe is what a video game is), I expect to own it in full, and that means I should have the freedom to do whatever I want with it.

Steam doesn’t allow me to do this. Granted, I’m in a minority, but this lack of control over a game I rightfully purchased rubs me the wrong way. I only played Half-Life 2 for the PC once. A lot of why I only played it once is because Steam proved to be such a headache for me to use. However, when it came to the Xbox version of Half-Life 2, I played that game a lot and, when I was done with it, I was able to give it to someone without having to deal with a bunch of DRM nonsense.

Until Valve & Co. come up with a way to have their games run without using Steam, without the invasive measures, and the other downsides others here have mentioned , I won’t be buying anything from them. For me, their method of doing business doesn’t work for me. GOG, however, has a wonderful service model (DRM-free, too, I might add!) that I wish more people/developers/publishers would jump onto.

I think the real conflict (from a consumer point of view) is the differences between Steam as a service, and Steam as DRM.

There have been several games which require you to have steam, and offer no alternative. (Empire Total War, Dawn of War 2 and anything by Valve). In these instances, it appears that Steam is being used as DRM rather than as the service which is it’s primary function.

These type of “locked in” games are a way of Steam gaining in percentage of digital download users, at the detriment of its rivals. This also helps to create a “locked in” culture, where a gamer may think that they already have Steam for some games, that they may as well purchase all their digital downloads through that one service. It can be rewarding for an individual, but at what cost to the general consumer in years to come?

I don’t think anyone would deny that Steam is, in fact, DRM. I’m also sure that everyone would prefer a DRM free world but that is somewhat impractical these days when it comes to games (and generally, digital entertainment). What remains, then, is the question of which is the best form of DRM… or rather, the most acceptable form. A lot of people believe Steam is it. Others don’t. Some people like having online activations and no dvd requirements for their games. Others will put up with a disc check but nothing more.

The same iTunes that went DRM free all of 6 months ago you mean? Besides, I suspect the move towards DRM free music is not so much to provide value to the customer, as it is to say “well, you’re likely to pirate it anyway. So here it is officially, DRM free and we hope you buy it”.

As for GoG, being successful, you neglected to mention that the average age of a game there is well over 5-8 years old. So why aren’t the publishing houses knocking on the doors of gog.com to get the latest and greatest releases on their service? That’s right, the DRM. So while gog is definitely (and deservedly) a success in it’s niche, calling it a testament to the success of selling DRM free games is, as you put it, “Bollocks”.

(a) Really sucky deals for developers
(b) Not many original/indie games
(c) Higher prices
(d) Download your game for 6 months, pay more for an extended download period
(e) Horrendous DRM.

While steam might not be perfect, it’s one of the best things that’s happened to PC gaming for a long time, as it’s taken the power out of the hands of the big 3 publishers, and put it in the hands of the developers.
If the gaming media just held steam a little more accountable, and if we could just all get it a little more transparent, with better customer service, we’d be laughing.

I don’t mean on discs. there won’t be any discs in a few years. I mean on the EA DD store, the Ubisoft DD store, etc… Unless you seriously think the big publishers aren’t going to try and control the direct download market. Or you think their offerings will have nice friendly DRM?

@vinraith:
Of course they exist, what’s that got to do with anything? Steam has 80% plus of the market. When EA, Ubisoft, etc… all really start promoting their stores, It’s gonna be very hard for small stores to stay in business, let alone compete and provide better options. Steam is essentially the only hope of keeping them in line.

Not at all. But, I’ve noticed that being anti-Steam is a sort of collective identity of the users of the gog.com forums. An otherwise fantastic place for discussions about games/gaming is somewhat dragged down by this particular trait.

I think Pitchford was trying to say that, while Valve/Steam may be exploiting the indie developers less than other distributors, they are still exploiting indie developers. A sort of, X may be better than Y, but X is still less than Z argument. I think its less of an argument against Valve/Steam, and more of an argument to the treatment of indie developer, but because Valve/Steam have the ‘best’ deal, they are the focus of the investigation. It boils down to, yes, Valve/Steam’s deal is good, but is it good enough.

Don’t get me wrong, I love Valve games, and I love Steam. I’m just presenting what I think is the argument.

As for the second part, I can see its merit. While its nice to think that Valve/Steam will always be benevolent, nothing lasts forever. As it gets larger and gains more control, the more possibility it will have to deny developers a massive market of buyers. Will it happen? Nobody really knows, but companies change all the time, from personnel, to outright ownership. Is it a possibility? Yes, which makes it worth pondering on at the very least.

I feel a little sorry for the guy. Pitchford sounds like he’s leaning on a bar somewhere shooting the shit gone midnight in those quotes. Another round and he’ll share with you some novel theory on why the twin towers really fell, or something like that. Unfortunately now he’ll probably have to back it up or back up.

I have to say, as someone else mentioned, I’m far more worried about Microsoft’s conflict of interest than Valve’s. At the end of the day, it’s in Valve’s interest to keep the PC gaming market going. Microsoft still seem to be of the opinion that a future iteration of the XBox series will be their crock of gold, and it’s worth stampeding over the future of PC gaming to get to it.